Every tiny gene therapy study run by a public biotech looking to make a breakthrough in curing a disease has two critical features. There’s the regulatory side, where FDA and EMA insiders need to be persuaded of their potential. And there’s the market side, where a host of analysts — real and self-appointed social media mavens — are ready to jump on any adverse event as a sign of impending defeat.

Spark $ONCE CEO Jeff Marrazzo has seen both sides up close. And his stock price is getting hammered this morning as the market zeroes in on a new update on the company’s hemophilia A program this morning overshadowed by a serious adverse event and other setbacks that the analysts quickly pounced on — overshadowing the more positive data the CEO would prefer to focus on.

Now that 12 hemophilia A patients have been dosed in their Phase I/II study, Marrazzo says that they’ve been able to track a dose-dependent response that persuaded them to move ahead into a pivotal Phase III at the high end: 2×10(12) vg/kg.

“We believe that the totality of the data supports moving into Phase III,” Marrazzo, a very careful speaker, tells me.

Researchers have observed promising responses for the first 2 patients in the study for more than a year now; step back, says Marrazzo, and you’ll see that the entire dozen patients have had a 97% drop in bleeds and 97% drop in the rate of infusions that had been needed to protect them from bleeds.

From a regulatory perspective, that’s a new standard of care to consider. But here’s where Spark — which is going right up against a more advanced BioMarin $BMRN program— encountered severe turbulence on the market side.

While 5 of the 7 patients in their chosen dose arm have experienced FVIII activity levels between 16% and 49% — hitting their projected range of 12% to 100% for up to 30 weeks — two have had setbacks. Immune responses caused their FVIII levels to drop below 5%, forcing them to switch to on-demand treatment. One chose to go into the hospital for infusions — a serious adverse event. There were also a number of ALT elevations in patients that raised concerns.

Of note, across the study, seven of the 12 participants received a tapering course of oral steroids in response to an alanine aminotransferase (ALT) elevation above patient baseline, declining FVIII levels and/or positive IFN- enzyme-linked immunospots (ELISPOTs). For these seven participants, steroids led to normalization of ALT and ELISPOTs. For all but the two above mentioned 2×1012 vg/kg cohort participants, oral steroids led to stabilization of target FVIII levels.

Spark’s shares plunged 29% after the release, which includes its Q2 numbers, hit the wire. BioMarin’s stock, meanwhile, is up about 6.5%.

Anytime you run a Phase I/II study of a new therapy like this, says the CEO, you have some learning to do about safety and efficacy. Even with the setbacks, he adds, the two patients have had good clinical outcomes, with a dramatic drop in bleeds and infusions. And with what they’ve learned from their work on hemophilia A as well as their closely-watched hemophilia B program, he added, there’s good reason to believe they can do better in Phase III.

Up to now, though, Spark has continued to run into problems with investors whose first reaction is to compare their hemophilia A program with BioMarin’s. And the BioMarin team’s performance has been winning kudos for a solid set of responses in a small group of patients. Marrazzo also likes to point out that their rival’s performance hasn’t been perfect either, but he’s not unaware that the market sees this as essentially a head-to-head affair — even if there’s no actual head-to-head study underway.

Marrazzo’s view: “We’re in the early innings of a long game. We believe with a standardized approach it will support the program as we move forward…We’re all learning this as we go,” he adds, noting that Spark is in a “very competitive race.”

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